Norwich Union comments on outlook for Japanese stock market and economy

Article date: 19 June 2006

Gerard Lane, Norwich Union investmentstrategist, said: “There are many reasons to look favourablyon Japanese equities and, certainly in the short-term, the recentsell-off has presented a trading opportunity to buy the assetclass.

“However, valuations still looked stretched against othercountries. Alongside moderating global economic growth, highlycyclical markets such as Japan look less appealing until themarkets become cheaper and the global economic outlook becomes morecertain.”

Stewart Robertson, Norwich Union economist, said: “After manyyears of being in the doldrums, the Japanese economy is nowgrowing.

“There have been many false dawns since the bubble economyburst in the early 1990s. Initially last year’s revival waslargely dependent on exports. But the most welcome development wasa clear-cut recovery in domestic demand – consumer spendingand corporate investment. The spectre of deflation has also faded– Japanese prices are now rising gently at last. Althoughthese trends should continue this year and next, the economicupturn may be more subdued than many commentators expect.Japan’s demographics are hardly favourable to consumerspending for example.

“However, most of the excesses from the previous economicdisaster in the early 1990s (absurd property valuations, massivebad debts in the banking system) have now been worked throughputting the economy on a sound footing once more.”


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Notes to editors:
Norwich Union is the UK’slargest insurer. It is a leading provider of life, pensions andinvestment products and one of the largest financial adviser (FA)providers. FAs provide over 70% of the company's long-term savingsbusiness in the UK.

Norwich Union is the UK’s largest general insurer with amarket share of around 14%, with a focus on insurance forindividuals and small businesses.

Norwich Union’s news releases and a selection of images areavailable from Aviva's internet press centre at

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